How to Start a Gas Station: Your 10-Step Ultimate Guide

Starting a Business
Guy Lalzary November 8, 2021 11 min read

Knowing how to start a gas station successfully is only part of the process of starting a gas station business. Here’s your in-depth 10-step guide to get your gas station running smoothly!

How to start a gas station in 10 steps the ultimate guide

Quick Guide

    If you’ve thought about how to start a gas station but have no idea what to do beyond that, then you’re in the right place! 

    There are two separate processes here: how to start a business, and how to start a gas station. Neither are particularly easy processes…but we’re here to help you at every step of the way! 

    From financial planning to welcoming your first customers and even hiring employees…we’ve got enough gas to keep you running. Here’s our ultimate guide on how to start a gas station! 

    Write Your Business Plan

    Experienced business owners should already be familiar with this part of how to start a gas station. Just like any other business, this is one of the most important parts because it’ll help you to focus on the whole process, from mission and vision to actual implementation, as well as  most of the questions you’ll face along the way and give your gas station a plan of attack. 

    Practically, this is the part when you perform a market analysis to assess the need for a new gas station in a particular area and the customers you’ll serve. 

    The business plan for how to open a gas station will also go over many of the other products you’ll sell in addition to gas, and inspire you to think BIG. 

    Many gas stations have car washes and air pumping stations where customers can put air in their tires or vacuum their cars. Some questions you might want to consider: 

    • Do you plan to also have a convenience store attached to the gas station? 
    • Will you be selling snacks, alcohol, tobacco, or lottery tickets? 

    These are all different ways to make money with a gas station, but they need to be planned out ahead of time in your business plan. 

    As mentioned, some gas stations even have an ice cream stand on the premises. Is this also going to be part of your business model based on your market research? These questions should all be answered to some extent in your initial business plan for how to start a gas station.

    Structure Your Business

    Creating a structure for your gas station business should be one of the first steps you take. Are you planning to operate an LLC or be a sole proprietor? The latter option is usually the simpler method, but an LLC can help with taxes and provide a little more protection in the event of bankruptcy or a lawsuit. 

    When writing up your business plan for how to open a gas station, it’s a good idea to run through some of the pros and cons of each option because you will likely have to decide one way or another before you get too deep into the process of starting your new gas station business. 

    Get Funding for Startup Costs

    While gas stations can be a lucrative business in the long run, getting them off the ground is rarely cheap. Startup costs can be in the neighborhood of a quarter of a million dollars, perhaps more, which isn’t money that everyone has just sitting around for a rainy day. If you’ve worked out some of the details about location, services, and potential expenses in your business plan, you should have a better idea of the exact startup costs, as well as how to keep your business costs low

    Even after that part is done, most people will require outside funding to start a gas station. Small business loans are a possibility, although it’s important to keep interest rates in mind before committing to anything. Friends, family members, and other angel investors could also help you get off the ground if you’re okay with having a silent partner or selling some of your stake in the business right away. 

    Setting up a credit card for your business is also a good idea right around the time that you’re seeking funding. Before you can get your gas station off the ground, you’ll need to make plenty of smaller purchases, so think of a credit card as part of the funding you’ll need to open your gas station.

    Buy Property and Equipment

    Once you’ve taken care of the funding that you’ll need to start a gas station business, you’ll be able to officially buy or lease the property where you’ll have your station. Remember, before purchasing the property, you will want to ensure that the site you select has the infrastructure needed for a gas station – including tanks and pumps. 

    Depending on your business plan, you may want to find a place that also has a car wash or other features already on site that you’ll want for your business. If the site has this equipment, make sure that the sale also includes ownership of the pumps and other necessary equipment. 

    Keep in mind that anything that isn’t already on the property will need to be purchased separately, which is something to think about when purchasing the right property for your gas station. 

    Choose a Name or Buy a Franchise

    Shell gas station

    This is one of the special steps for how to open a gas station that may not apply to other businesses. Some folks think that it’s safer to buy into a gas station franchise so that their gas station comes with a trusted name like 7-Eleven, Sunoco, or Marathon. Of course, this can add to the startup costs by tens of thousands of dollars, not to mention royalty costs over time. 

    You will also want to make sure you have legal representation before signing a contract with a big oil franchise. 

    However, franchising your store and taking on a trusted name can give your gas station a certain level of credibility with new customers. If you decide to go the other direction, you’ll need to come up with a unique name for your gas station that you’ll be able to trademark and feel comfortable keeping for a long time to come.

    Find a Supplier

    Of course, one of the most important steps in how to open a gas station is finding a supplier for the gasoline that you’ll sell. You’ll need to sign a contract with a wholesale provider and come up with a schedule for replenishing your reserves. 

    If you work with a franchise, they can help you out with this and will have certain preferences. Otherwise, you’ll be on your own when it comes to signing a contract with a supplier, keeping in mind that they will take a certain percentage of your sales based on the rate that you negotiate with them.

    Take Care of Permits and Insurance

    One step that can’t be skipped when opening a gas station is acquiring the proper permits and insurance. Of course, you will need a business license, but gas stations also require environmental permits. There are also permits required if you serve food or have other sources of income beyond just selling gas. Before you’re ready to open for business, always double-check with your local municipality to make sure all of your permits are in order. 

    This is also a good time to make sure that your new business is properly insured. General liability insurance is a given, but gas stations require a little more than basic business insurance. There is workers’ compensation insurance, fuel tank contamination insurance, and even liquor liability insurance if your gas station plans to sell alcohol. You may also need to acquire franchise insurance if you decide to go that route with your business.  

    Get The Right Technology

    At the end of day, starting a gas station requires some heavy lifting. But once your doors are finally open, you need the right technology to manage the day-to-day operations and standard operating procedures.

    You already know you need a proper POS system, especially one that is connected to the pumps themselves. 

    But what about the other tasks? Like time tracking, job and shift scheduling, communication, reporting, and more. Pen and paper aren’t going to cut it. 

    This is where an all-in-one app comes in! And Connecteam leads the pack as the best and true all-in-one solution to run your gas station.

    And this is just scratching the surface! Connecteam offers this, and more, to keep your station running like a well-oiled machine (pun intended!). 

    Market Your Gas Station

    Finally, once you’ve taken care of all of the boring parts of how to start a gas station, it’s time to start marketing your new business. Unfortunately, it’s not always as simple as people stopping when they need gas or wanting to pick up a few things from a convenience store. After all, most people already have a gas station that they visit regularly. 

    Of course, if you go with a franchise, they’ll help with branding and marketing. If not, it becomes critical to develop a web presence and social media channels so that people searching the internet for gas stations in their area can find you. 

    There are also more marketing options for you beyond the internet. For example, you can start a loyalty program or create partnerships with food vendors. Even good, old-fashioned highway signs can help a new gas station business get off the ground.

    Prepare for the Future

    gas station

    No business is future-proof or sudden shocking-global change proof (as the pandemic continues to show us!), so it really pays to prepare for the future, come what may. 

    Here are a few things to focus on, once your doors are open to customers (or even before, if you’re really organized!) 

    Moving Forward on Starting A Gas Station: Prepare and Implement

    Can you think of a business more lucrative or stable than a gas station? We sure can count them on our fingers. 

    So, really, as far as opening a gas station business goes, it’s always a sure gig. After all, everybody needs gas to power their cars and other vehicles. 

    And, while the days of 100% electric vehicles are ahead, they still are in the distant future – if you can add electric charging stations, that’s an even bigger pull! 

    Of course, it’s easier said than done; the tricky part is how to start a gas station and how to own a gas station. It’s not exactly the same as opening any other type of business. Even for experienced business owners, there are steps in opening a gas station that may be unique and unexpected. 

    But that doesn’t mean that opening a gas station isn’t a good idea under the right circumstances, which is why we wanted to go over the steps for how to start a gas station and turn it into a successful business.

    Do your research, set up your contingency plan for if/when incidents occur, and keep one eye on your inventory management and you should be good to go! 

    To get your gas station business off to a roaring start, you need to invest in the right support systems and software to help your engine keep ticking over. With Connecteam, your gas station’s more routine tasks – employee shift scheduling and time tracking, work-related chat and important updates, even new employee training – can be taken off your mind. 

    Using the right software like Connecteam, continuing your gas station’s growth will be a gas! 

    Efficiently Run Your Gas Station Business with Connecteam!

    14-day free trial, no credit card required: take it for a spin now!

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